What is the most important tip for a first-time homebuyer?
Before you begin touring homes, decide what total monthly housing payment feels comfortable for your household.
A mortgage preapproval may show the maximum amount a lender is willing to finance. That number does not automatically represent what you should spend. Your personal budget should guide your home search.
The Consumer Financial Protection Bureau explains that a total monthly home payment may include:
Mortgage principal and interest
Property taxes
Homeowners insurance
Mortgage insurance, when applicable
Flood or other supplemental insurance
Homeowners association fees
These expenses can make the true monthly cost of owning a home significantly different from the principal and interest payment alone.
Why does the total monthly payment matter in Florida?
Florida buyers should consider insurance costs, property taxes, HOA fees and possible Community Development District assessments, commonly called CDD fees.
When comparing homes, ask:
Does the property have an HOA or CDD?
If it has a CDD, how much remains on the bond portion?
Is flood insurance required or recommended?
What will the property taxes likely be after the sale?
How much should I reserve for maintenance and repairs?
A lower-priced home is not always the home with the lowest monthly ownership cost.
Should first-time buyers compare more than one lender?
Yes. Request Loan Estimates from multiple lenders and compare the total monthly payment, interest rate, lender fees, credits, cash needed to close and five-year borrowing costs.
The Loan Estimate is a standardized form designed to help buyers compare mortgage offers. The Consumer Financial Protection Bureau recommends reviewing multiple Loan Estimates before selecting a lender.
What should a first-time VA homebuyer know?
Eligible veterans may be able to purchase a home with no VA-required down payment and no monthly private mortgage insurance. Some veterans receiving compensation for a service-connected disability may also be exempt from the VA funding fee. Eligibility and exemption status should be verified with a VA-approved lender.
As a retired Army veteran, Florida real estate broker and real estate educator, I encourage buyers to start with strategy before looking at listings.
The goal is not simply to qualify for a home. The goal is to purchase a home that fits your finances, lifestyle and plans for the future.
Sources
Consumer Financial Protection Bureau: Determine how much you want to spend
Consumer Financial Protection Bureau: Compare Loan Estimates
U.S. Department of Veterans Affairs: VA funding fee and closing costs
About the Author
Ollie Green is the Broker/Owner of Fleur De Lis Luxe Realty, a retired 22-year U.S. Army veteran, and a real estate professional who began in 2018. She specializes in helping first-time buyers and relocation clients purchase single-family and new-construction homes in Riverview and SouthShore Tampa.